VIRGIN Australia (ASX: VAH) and Delta Airlines have been given the green light by the Australian Competition and Consumer Commission (ACCC) to run their popular trans-Pacific services for a further five years.
The alliance between the airlines allows for streamlined travel between Australia and the United States, in addition to smoother transitions within respective domestic networks, according to ACCC chairman Rod Simms.
Virgin and Delta operate return services between Sydney and Los Angeles, and Brisbane and Los Angeles.
"Travellers use these key gateway points to then connect with other destinations," says Simms. "This is reflected in the growing number of passengers using such connecting services."
While the service offered by Virgin and Delta accounts for a 37 per cent combined market share on the key overlap route of Sydney to Los Angeles, the ACCC is satisfied that the public benefit in this instance outweighs the negative repercussions on fair competition.
"The alliance has also resulted in enhanced products and services including increased and better connections, access to each other's flights and better schedule spread, loyalty program benefits and improved lounge access," says Simms.
However, while the ACCC renewed the term of the agreement for a further five years, it rejected Virgin and Delta's initial application for a 10-year arrangement.
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